Impact Evaluation of the Women Entrepreneurs Finance Initiative in Sri Lanka

Background
At the request of the Asian Development Bank (ADB), SEO Amsterdam Economics conducted an impact evaluation of activities provided under the Women Entrepreneurs Finance Initiative (We-Fi) in Sri Lanka. Between 2016-2022, ADB provided small and medium-sized enterprises (SMEs) in Sri Lanka with an SME Line of Credit as well as a grant and business training programme, specifically focused on women entrepreneurs.

The main objective of the impact evaluation was to measure the impact of the business training on the business practices and business performance of women entrepreneurs. SEO carried out the impact evaluation between June 2019 and April 2023, , together with Professor Suresh de Mel and the Kandy Consulting Group (KCG) in Sri Lanka. This was part of a larger assignment carried out by a consortium led by Palladium Europe.

Key Findings
Despite a rigorous quasi-experimental setup, the impact evaluation provided only limited quantitative evidence that the training programme improved the business practices and performance of women entrepreneurs. This lack of significant improvements was likely related to a series of serious crises experienced by Sri Lanka during the evaluation period. However, the study did provide qualitative evidence that the training program was appreciated and perceived as useful by participants.

• While there was no hard evidence that aggregate business practices improved, the quantitative impact evaluation did indicate that the online training had a statistically significant positive effect on some business practices, including business registration.
• The econometric results showed that the online business training had a statistically significant positive effect on sales. However, there was no statistical evidence that the training contributed to other outcomes, such as profitability, cost reduction, or employment.
• The lack of evidence of improved business outcomes is likely related to the series of severe national crises affecting Sri Lanka during the evaluation period: the COVID-19 pandemic, terrorist attacks, and an economic and financial crisis. It is plausible that this limited the trained women entrepreneurs in practically applying their new insights.
• Nevertheless, there is qualitative evidence that the business training programme was appreciated and experienced as useful by women entrepreneurs. Trainees expressed strong satisfaction and recommended the training programme to their peers. The fact that the training programmes were geared towards completing a business plan was particularly well appreciated, as the majority of trainees indicated that they needed time to rebuild their businesses following the various crises they experienced.

Recommendations
Based on this study, SEO offered several key recommendations and lessons learned for similar future training programmes:

1. Prior to designing a training curriculum, conduct a thorough initial needs assessment to determine what type of training is most needed.
2. Differentiate the training content to different target groups (e.g. micro-entrepreneurs versus SMEs), tailored to their needs and capabilities to implement and benefit from the training.
3. Design training programmes so as to alleviate unique barriers faced by women entrepreneurs (for example, incorporate networking events into the training programme if access to business networks is a barrier).
4. Design training curricula that focus more on improving linkages between business practices and business outcomes (for example, by focusing on business practices that can concretely help to reduce costs or increase sales).
5. Combine business training programmes with access to finance programmes, as their combination has proven to be more effective than business training offered by itself.
6. Improve the likelihood of achieving sustainable impact by providing follow-up training with regular or repeated interventions.
7. Consider offering more ‘blended’ training programmes that combine online with face-to-face training.

Methods
SEO evaluated the training programmes by combining a quantitative (econometric) analysis with qualitative focus group discussions (FGDs).

• The quantitative analysis consisted of a quasi-experimental difference-in-difference (DiD) analysis of survey data to compare changes in business practices and business outcomes between training participants (treatment group) and comparable non-participants (comparison group).
• The qualitative analysis was based on FGDs with participants in the online business training; FGDs with participants in an earlier face-to-face training; and FGDs with a comparison group consisting of non-participants. The discussions focused on the impact of COVID-19 and the various other national crises, access to finance, and the training and loan programme, among other topics.